WASHINGTON, May 31, 2017 – U.S. Commerce Secretary Wilbur Ross says he's anxious to move quickly on renegotiating the North American Free Trade Agreement, stressing that his goal is to “do no harm” to exports of U.S. farm commodities and other goods to Mexico and Canada.
“The first guiding principle … is do no harm because there were some things that were achieveed under NAFTA and other trade agreements,” Ross said in a discussion today hosted by the Bipartisan Policy Center in Washingtonl.
One of the major NAFTA achievements for the U.S. farm sector was the removal of virtually all tariffs on U.S. corn, soybeans, rice, wheat, beef, pork, sorghum and other farm commodities. That lack of tariffs has allowed U.S. agricultural exports to Mexico to skyrocket, making it the largest foreign market for crops like rice and corn. NAFTA also tore down barriers to U.S. exports of beef and pork to Canada, spurring increased trade as well domestic demand for feed grains.
The U.S. exported about $20 billion worth of agricultural commodities to Canada in 2016 and about $18 billion to Mexico, according to USDA data.
Chip Bowling, chairman of the Corn Board for the National Corn Growers Association, also spoke at today's event. He said that he and his group are still very concerned about any repercussions the NAFTA renegotiation may have on corn exports.
Bowling, who spoke to Agri-Pulse after the event, said he doesn’t know enough about the Trump administration’s plans and goals yet.
“I think they’re still trying to figure out which direction they need to go,” Bowling said. “We haven’t had any type of a conversation with Mr. Ross or the administration at this point. We’re not less concerned, but we want to make sure we keep what we have and actually build upon it. Until we have those conversations, we’re on high alert when it comes to NAFTA – that’s for sure.”
On the upside, Bowling said he is heartened by Trump administration assurances that farm groups like NCGA will have a seat at the table during renegotiation.
And that’s coming up fast. On May18, the White House gave Congress official notice that it intends to renegotiate NAFTA. That notification opened up a 90-day window for Congress to work with the administration on priorities for renegotiating the trade pact. Ross said today that most of those discussions will likely ramp up in July as he and other officials sit down with leaders on Capitol Hill.
Meanwhile, Bowling said NGCA is anxious to begin working with the Trump administration. The primary concern, he said, is that the U.S. will insist on measures to deter U.S. imports of Mexican or Canadian products. That could result in those countries erecting barriers to U.S. farm commodities in retaliation.
USDA export data show just how much U.S. corn growers benefited from the removal of tariffs under NAFTA. The U.S. exported about $35 million worth of corn to Mexico in 1993, the year before NAFTA went into force. Twenty-three years later, in 2016, sales were worth $2.6 billion.
Bowling said he has already heard from Mexican corn importers who said they are exploring potential deals with suppliers in Brazil and Argentina in the event that the NAFTA renegotiation results in tariffs being placed on U.S. corn. If new tariffs were to be placed on U.S. corn, that could make South American grain cheaper than buying from the U.S.